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The manner of appointment, the qualifications, and the format of reporting by an external auditor are defined by statute, which varies according to jurisdiction. External auditors must be members of one of the recognised professional accountancy bodies. [2] External auditors normally address their reports to the shareholders of a corporation.
Most importantly, external auditors, though engaged and paid by the company being audited, should be regarded as independent. Internal Auditors are employed by the organizations they audit. They work for government agencies (federal, state and local); for publicly traded companies; and for non-profit companies across all industries.
The objectives of an external audit or audits being conducted by someone not part of the business, is when one business audits a different business to determine if the accounting records are complete and correctly prepared according to GAAP (GAAP is the highest U.S. power on accounting standards and they must be followed by jurisprudence when preparing financial information for businesses ...
Similarly, an auditor's objectivity must be beyond question, but how can this be guaranteed and measurement, but appears independent too. If an auditor is in fact independent, but one or more factors suggest otherwise, this could potentially lead to the public concluding that the audit report does not represent a true and fair view.
Consultant auditors are external personnel contracted by the firm to perform an audit following the firm's auditing standards. This differs from the external auditor, who follows their own auditing standards. The level of independence is therefore somewhere between the internal auditor and the external auditor.
Audit (disambiguation) Audit committee; Audit management; Audit regime; Audit risk; Audit storm; Audit technology; Auditing and Assurance Standards Board; Auditing in India; Auditing, Review and Other Standards; Auditor; Auditor independence; Auditor's report
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A "statutory audit" is a legally required review of the accuracy of a company's or government's financial records. The purpose of a statutory audit is the same as the purpose of any other audit – to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records and financial ...